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FHA Home Loan

An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA). Essentially, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments.

The FHA program was created in response to the rash of foreclosures and defaults that happened in 1930s; to provide mortgage lenders with adequate insurance; and to help stimulate the housing market by making loans accessible and affordable.

FHA loans allow for lower down payments (3.5%), higher debt-to-income ratios, and more flexible underwriting guidelines. Both Fixed and Adjustable Rate Mortgages (ARMs) are offered, which tend to remain competitive with the conventional market. However, they do have limitations as to maximum loan size, which can vary by county, and properties must be owner-occupied.

FHA loans follow the Fannie Mae and Freddie Mac loan limits. Check out the chart below to see the limits for Santa Cruz, Santa Clara and Monterey counties.  Click here for a list of all counties in California. (Opens in Microsoft Excel)

Santa Cruz Home Finance is not affiliated with or acting on behalf of or at the direction of FHA, VA or the Federal Government.

 # of Units                                     FHA Loan Limit for  Santa Cruz & Santa Clara Counties

     1                                                                                       $636,150

     2                                                                                       $814, 500

     3                                                                                       $984,525

     4                                                                                       $1,223,475

# of Units                                                      FHA Loan Limit for Monterey County

     1                                                                                      $575,000

     2                                                                                      $736,100

     3                                                                                      $889,800

     4                                                                                      $1,105,800

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